In a bid to move economic cooperation to 'greater heights', India and China have decided to set up a Joint Study Group of economists and officials to identify new areas for economic interaction.

"Our two governments have decided to make concerted efforts to move our economic cooperation to greater heights," Prime Minister Atal Bihari Vajpayee said in a keynote address at a seminar on 'China-India Economic Cooperation and Development' in Beijing.

During his meeting with Chinese premier Wen Jiabao on Monday, the two leaders decided "to form a Joint Study Group of economists and officials from our two countries to review existing cooperation, to identify new areas of promise and to draw up a comprehensive perspective plan for the further development of a multi-faceted interaction," Vajpayee said.

On the third day of his six-day official visit to China, the prime minister asked businessmen in both countries to provide 'meaningful inputs' for this initiative.

For rapid expansion of economic interaction, it was very important to strengthen passenger and cargo transportation links, banking support structures and trade facilitation majors, he said.

"While governments on both sides can work to address these infrastructural problems, it is for private business and industry to optimise their utilisation," Vajpayee said.

Terming the two countries as the 'most dynamic economies' of the world, Vajpayee said while China ranks first in terms of purchasing power, India follows close at fourth position.

"The Indian economy has also made impressive strides in the last decade or so. In the last 12 years, we have recorded an average annual growth rate of 6 per cent. India is the world's fourth largest economy on the basis of purchasing power parity."

"Our external trade has recorded a steady annual growth rate of over 8 per cent in the past decade," the prime minister said.

"Indian companies are now acquiring brand recognition abroad in cutting edge areas like information technology, biotechnology and pharmaceuticals," he said, adding that the Forbes 200 ranking last year of the world's best small companies included as many as 13 Indian companies.

Vajpayee said the twin objectives of his visit to the communist state were to establish close relations with the new Chinese leadership and impart fresh momentum to the comprehensive cooperation, which India and China are in the process of building.

Emphasising on the mutual desire to strengthen bilateral ties at the highest political levels, he said the Chinese leadership has also confirmed they want to build `stable, enduring and forward-looking ties of friendship'.

On the successful and buoyant trade relations between India and China, Vajpayee said "though it is from a narrow base, the recent annual growth rate of 30 per cent in our bilateral trade relations is quite significant.

"In the first four months of this year, bilateral trade registered an astonishing growth of about 70 per cent."

Lauding China's high economic growth and modernization drive, Vajpayee said his current visit has "truly been an eye-opener."

He said that the Indian business delegation accompanying him on his visit is among the largest that has travelled with him on his official visits abroad.

"This says something about the potential which Indian trade and industry circles see in economic cooperation with China," Vajpayee said.